Overview
Innovative Solutions For Decoupled Debit
Debit Cards: The Untapped Asset
For years, financial institutions have automatically issued debit cards as a standard feature of the DDA checking account to enable customers to conveniently access funds. The debit card relationship was impossible to disintermediate as long as the DDA relationship persisted — and consumers are unlikely to change their DDA relationships.
Decoupling Debit from DDA
Today, "decoupled debit" has given rise to a new standalone debit card market that is fundamentally changing debit card strategies and customer relationships. With decoupled debit, the financial institution issues a new type of debit card that settles through the ACH. The issuer does not need to be the cardholder's DDA bank.
The Opportunity for New Customer Capture
Since debit cards can now be decoupled from DDAs and marketed as standalone products, financial institutions have a new way to acquire customers through affinity programs. In this new environment, the total available market for debit cards has now expanded far beyond the institution's own DDA customers — it encompasses virtually any deposit customer of any bank. Of course, decoupled debit also means that traditional DDA customer relationships are also at risk because competitors can now issue decoupled debit cards to non-DDA customers.
How will you respond to the decoupled debit opportunity?
Tempo has the answer.
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